The Intelligent Investor:
If you want to become rich then at some point in your life you need to invest.
Whether you do business or job you need to invest money to make money.
There are many books related to investment but The Intelligent Investor is the Bible of investment. Many successful investors read this book and become successful investors.
Let’s see the core fundamentals of this book to learn investment.
Aggressive Vs Defensive:
Go for the Defensive investment. The aggressive investor doesn’t go for the reputation of the company. The aggressive investor always go towards a high return on investment.
So, according to the writer in long term aggressive investments put you in the loss. It’s like gambling if you may win one time but most of the time you are going to lose.
So, we should avoid aggressive investments.
The stock market is not logical, it works on the emotions of people.
Sometimes the stock market is buying or selling not on actual values. So you should read the market carefully.
Always buy when the market is selling below its actual value and sell when you are getting more value.
These are those investors who think long term and play safe. The author suggest to common people to be defensive investors.
Some important factors for defensive investment
1-Diversify your investment. Invest in at least 10-30 companies
2-Invest in large and well-established companies.
3-Invest in those companies whose assets are double than its liabilities.
4- Invest in that company that is giving a dividend from the last 10-20 years.
5-Invest in those companies who are not facing any deficit from last 10-20 years
6-Invest in those companies who are growing with 3 % from the last 10 years
7-Invest in cheap assets.
8- Invest in those companies whose P.E is less than 15 from last year.
These are those investors who do research markets and companies properly.
These are those investors who beat the market sometimes. They make very good money but for this, you need to put your efforts in one direction.
You need to invest your time and energies to see market trends and research companies’ portfolios. These type of investors need 4 things
2-Eagerness to learn
4-Lots of time
Margin Of Safety:
In the stock market don’t buy any company at its actual stock price. Buy those stocks whose current value is below its actual value so that when you buy a stock you get profit instantly.